FCC Targets TV Joint Ad-Sales Deals

Federal Communications Commission Chairman Tom Wheeler is planning to put forth a proposal on media-ownership rules that would make it harder for broadcast companies to control two TV stations in the same local market by using a single advertising sales staff, according to people familiar with the matter. The five-member commission is expected to vote next month on a long-awaited order, which Chairman Wheeler is likely to make public in the coming weeks.

Under current rules, broadcasters typically are banned from owning two full-power TV stations in the same local market. But some companies have skirted that restriction by using agreements that allow them to control programming and ad sales at a second station through agreements with the owner. Consolidation in the broadcast industry in recent years has resulted in the proliferation of companies that outsource the management of their stations, sometimes called sidecars. One type of arrangement known as a joint sales agreement allows one station to sell advertising on behalf of another, while charging it for the service. As part of the commission's regular review of its media ownership rules, Wheeler's order would treat broadcasters as the owners of any station for which they handle more than 15% of the advertising sales. If the five-member commission approves the order, many larger broadcasters, such as Sinclair Broadcast Group, could be forced to unwind the agreements that don't meet these requirements within two years or face a potential violation of the FCC's media ownership rules. Individual companies could also apply for a waiver, which would have a high threshold for approval.